Factors to Keep in Mind While Opting for a Critical Illness Insurance Policy

Factors to Keep in Mind While Opting for a Critical Illness Insurance Policy

An individual suffering from a critical illness may have to meet various expenses to live their life. This is why people purchase a critical illness insurance policy. However, it is essential to learn and consider various facts before or while buying a critical illness insurance policy. Without essential knowledge, a policyholder may not avail of the specific coverage he needs to fulfil his health requirements. 

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Factors to Understand While Opting for Critical Illness Insurance Policy

An individual must keep the following factors in mind while opting for a critical illness insurance policy.

Waiting Period

The waiting period is the length of time when the insured is expected to be alive when he has been diagnosed with a critical disease. Once the survival period is passed, the policyholder may claim the policy and obtain the benefits. The survival period is similar to the waiting period in a health insurance policy. However, it is much shorter than the waiting period.

If the policyholder dies during the waiting period, the benefits of the insurance shall not be given to the nominee. A nominee may claim benefits in whole or term life insurance. However, in a critical illness insurance policy, it is the primary condition imposed by the insurance company that the policyholder is subject to being alive till the survival period ends in order to claim the compensation. A policyholder is expected to let 15 to 30 days pass before obtaining the cost of recovery treatment.

  • Coverage for Illness

The insurance company shall appreciate the only claim made by the policyholder which falls under the list of illnesses as specified under the documents of the insurance company. Every insurance company possesses a list of illnesses which they cover under the policy.

An insurance buyer must check the list of illnesses while purchasing a critical illness insurance policy. An individual may check the history of disease that a family has gone through and then consult the insurer about the list of ailments that are covered.

Here are some common ailments which are generally covered by the insurance company under a critical illness insurance policy.

  • Health attack (Generally first)
  • Cancer
  • Coma can also be covered to a certain severity
  • Open health replacement is also covered by the insurance company
  • Transplant of bone marrow or major organ can also be covered under the insurance policy
  • An individual may also obtain coverage for motor neuron disease. However, it should have permanent symptoms
  • Deafness
  • Major burns
  • Stroke that may result in permanent symptoms can also be covered by the insurance company
  • Kidney failure
  • Paralysis of limbs (should be permanent)
  • Loss of speech
  • Major burns of body part
  • Liver disease (end stage)
  • Lung disease (end stage)
  • Multiple sclerosis

It is important to note that the premium for critical illness is generally expensive. It may vary on the basis of several factors. This includes health condition, age of the policyholder, coverage amount to be paid to the policyholder and features chosen by the insurance buyer. It is in the best interest of an individual to compare the premiums quoted by different insurance companies and then move for the affordable one.

It is also an essential factor to consider the flexibility of payment of premium. The insurance companies offer different kinds of frequency which allows the policyholder to pay the premium monthly, quarterly, annually etc. The policyholder should opt for the policy which aligns with his financial preferences.

  • Review and Reputation

The insurance company with sound goodwill is likely to settle or honour the claim made by the policyholder. It is a must to check the CSR (Claim Settled Ratio) of the insurance company while purchasing the critical illness insurance policy. It is imperative to check the policyholder’s reviews and testimonials about the insurance provider.

  • Expiry of Policy

A policyholder must be familiar with the expiry of the policy. In addition, he must renew the policy in order to continue with the coverage. It may result in financial loss to the policyholder. On top of that, the policyholder shall be subject to restarting the fresh application which might be challenging.

The insured must check the grace period provided by the insurance company for the renewal of the critical illness insurance policy. A reasonable grace period ensures that the policyholder may take some more time to renew the policy.


A policyholder is required to accomplish a comprehensive assessment of the health and financial situation before purchasing the critical illness insurance policy. He must consider the survival period and coverage offered by the insurance company against critical illness. In addition, he must also check for premiums and renewal or expiry of premiums. The aforementioned factors are essential to consider in order to make an informed decision.


Q. What are some common exclusions in critical illness insurance policies?

A. Here are some common exclusions in critical illness insurance policies that a policyholder must consider before purchasing the policy.

  • Claims against self-inflicted injuries are bound to be rejected.
  • Critical illness which can result from intoxication shall not be covered under the policy.
  • Illness due to HIV (Human Immune-deficiency Virus) is not covered under the policy.
Q. Who should purchase a critical illness insurance policy?

A. The following group of people must purchase the insurance policy.

  • People more than 40 years of age
  • Senior citizen
  • People who have experienced serious illness
Q. What are some other factors that an individual may consider while purchasing a critical illness policy?

A. Here are some other factors to consider while purchasing the critical illness policy.

  • The policyholder must consider the claim process by consulting the insurer.
  • He should also consider his pre-existing condition.
  • The network hospital and cashless benefits should also be considered by an individual.
Q. What does a policyholder receive after filing the claim?

A. If the claim is accepted, the policyholder shall receive a lump sum amount from the insurance company. The amount shall help the policyholder to pay the treatment cost, medicines cost and doctor’s fee.

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